3 Regency Plaza
Providence
[LOGO] Rhode Island 02903
Phone 401.453.6100
Log On America, Inc. Fax 401.459.6222
LOG ON AMERICA COMPLETES EQUITY PLACEMENT AND EXECUTES SENIOR CREDIT
FACILITY WITH NORTEL NETWORKS
Company Now Has Funds To Complete New England Broadband Build-out and
Implement Its Business Strategy
PROVIDENCE, RI, February 23, 2000 - Log On America, Inc. (Nasdaq: LOAX), a
rapidly growing D-CLEC+ providing DSL as well as a full line of commercial and
residential CLEC and ISP services in the Northeast, today announced that it
closed a $15 million tranche of a potential $35 million equity investment. The
investment was made by several institutional investors including Marshall
Capital Management Inc, in conjunction with a $45 million senior credit facility
with Nortel Networks. The Company will use the proceeds for the buildout of its
high-speed, broadband network in the Northeast and the acceleration of its sales
and marketing efforts.
David Paolo, Chairman and CEO of Log On America, commented, "When you combine
the recent financing from our institutional investors and our strategic partner,
Nortel Networks, we now have access to the necessary capital for our New England
roll-out of our advanced high speed broadband network. Clearly we have the
financial and strategic resources necessary to solidify Log On America's
position as a Regional New England player in the fast growing and lucrative
market for commercial and residential advanced broadband voice and DSL bundled
services."
Under the terms of the placement, the institutional investors will initially
purchase $15 million in Log On America Series A Preferred Stock and common stock
purchase warrants. Subject to certain conditions, the investors will purchase an
additional $10 million in Series A Preferred Stock with warrants. The investors
have the option at any time approximately in the first nine months to purchase
an additional $10 million at the same terms. Subject to certain exceptions, the
investors are restricted from converting their shares in the first six months,
and Log On America will maintain certain mandatory conversion rights.
About Log On America
Log On America, Inc. is a Northeast Regional D-CLEC+ providing local dial tone,
in-state toll, long distance, and high-speed Internet access and cable
programming solutions over traditional copper wire using xDSL technology to
residential and commercial clients throughout the Northeast. For more
information on Log On America, please see our Web site at http://www.loa.com.
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Log On America Page 2
Contacts:
Investors: David Pasquale, 917-639-4277 Media: Connie Lee, 917-639-4112
Both with The Ruth Group, http://www.TheRuthGroup.com
Forward-Looking Statements
Statements made in this news release, including those relating to the company's
financing by Nortel Networks and institutional investors. Actual results may
differ materially depending on a number of risk factors including, but not
limited to, the following: development, shipment, market acceptance and
additional competition from existing and new competitors which will impact new
customers. Other risks inherent in the business of the company are described in
Securities and Exchange Commission filings, including the company's prospectus
on Form SB-2. The company undertakes no obligation to revise or update any
forward-looking statements to reflect events or circumstances after the date of
this release.